JTH Tax, Inc. v. Frashier, 09-2262

Dismissal of plaintiff's suit against franchisee for lack of subject matter jurisdiction reversed

JTH Tax, Inc. v. Frashier, 09-2262, concerned a challenge to the district court's dismissal of plaintiff's suit for lack of subject matter jurisdiction, in plaintiff's suit against one of its franchisees, claiming that the franchisee breached his post-termination duties by using his former office to support a competing tax enterprise and by failing to return the requisite materials to plaintiff.

In reversing the dismissal, the court held that jurisdiction turns not on the sum contained in plaintiff's summary judgment motion, but on the good faith of the allegation in its complaint of an adequate jurisdictional amount, and here, the district court did not find, nor has defendant even argued, that plaintiff made a bad faith claim of $80,000 in its complaint.  The court also held that the plaintiff has demonstrated that the injunction, whether valued for the benefit it confers on plaintiff or the detriment it imposes on defendant, arguably yields a figure that exceeds the necessary jurisdictional amount.

Related Link:

• Read the Fourth Circuit's Full Decision in JTH Tax, Inc. v. Frashier, 09-2262